Georgia seeks tax haven status for IT companies

15/07/2010

The former Soviet state of Georgia is aiming to establish itself as an unlikely venue for the registration of new British IT businesses.

The government of the troubled country – which until recently was at war with Russia – announced this week that it is to set up new initiatives to create a haven for IT organisations. International and domestic businesses will receive new financial exemptions, introduced to develop the digital economy of the country.

Prime Minister Nika Gilauri said that the benefits of the scheme would apply to all businesses engaged in producing information technology and developing and implementing computer programmes.

Gilauri hopes the proposal, which is currently being determined by government officials and yet to be rubber-stamped by parliament, will allow Georgia to rival fellow former communist nation Belarus for technology trade. The Eastern European country already operates as an IT tax haven.

Economists predict the initiative will be given the go-ahead, especially as a similar scheme exists for exporters wishing to register their offices in Georgia. Industrial manufacturers receive exemptions from corporation tax if they locate themselves in designated enterprise zones in Poti and Kutaisi.

Dismissing the idea that British investors may balk at the idea due to the cultural and linguistic barriers, Georgian trade chiefs have drawn encouragement from the rise of some Middle Eastern nations as economic forces.